Pound Extends Gain as Focus Shifts to Fed Chair Warsh

Key Moments

GBP/USD Extends Recovery as Dollar Softens

The British Pound is trading slightly higher around 1.3285 against the US Dollar in Asian hours on Friday, continuing the strong rebound seen on Thursday. The GBP/USD pair has staged a notable recovery after dropping to a fresh 10-month trough of 1.3137 on Wednesday, a move that came alongside broad US Dollar strength.

At the time of writing, the US Dollar Index (DXY) – which tracks the US currency against a basket of six major peers – is holding near 101.90, retaining the prior session’s losses. Market participants are positioning cautiously ahead of upcoming remarks from Federal Reserve Chair Kevin Warsh, which are expected to shape the next directional move in the Dollar.

Focus on Fed Chair Warsh’s Fireside Chat

Later in the day, traders will closely monitor comments from Fed Chair Kevin Warsh on the outlook for the US economy and inflation. Warsh is scheduled to speak at a fireside chat with International Monetary Fund Managing Director Kristalina Georgieva at 03:30 GMT. The event is seen as a potential catalyst for heightened volatility in the US Dollar as investors assess any policy-relevant signals.

BoE’s Bailey Cautious on Inflation, Sees Limited Second-Round Effects

On the UK side, Bank of England Governor Andrew Bailey has, in line with other policymakers, dismissed significant concerns that recent energy shocks are already feeding into wages and broader consumer prices. Nonetheless, he emphasized that inflation remains above target and described the situation as “enormously frustrating”.

According to FXS Speechtracker, Bailey’s latest appearance was scored at 6.2/10, slightly under his historical baseline of 6.4/10. This points to a somewhat softer market impact than usual, even as he reiterated concern about elevated UK price pressures. His comments that second-round inflation effects are still “too early” to fully assess but currently “subdued,” with firms prioritizing cost reductions, were interpreted as mildly dovish at the margin. This tone tempers expectations for aggressive near-term tightening and caps the upside potential for the Pound.

Bailey’s observation that the UK economy is “more resilient than we expected, not as strong as we need” underscores a cautious policy stance, suggesting the BoE will weigh its frustration with above-target inflation against growth headwinds. He also highlighted that developments in the Middle East are the primary driver of moves in UK gilt yields, pointing to external risk premia rather than a domestic policy-led repricing. As a result, GBP remains supported by persistent inflation concerns but exposed to shifts in global risk sentiment.

GBP/USD Technical Picture

On the daily chart, GBP/USD is trading around 1.3282, sitting just above the 20-day exponential moving average (EMA) at 1.3277. This level is acting as immediate trend support and suggests a cautiously constructive short-term backdrop as the pair attempts to stabilize following its recent decline. However, the Relative Strength Index (RSI) stands at 47.99, below the neutral 50 threshold, indicating that bullish momentum is still fragile and that any additional gains are likely to require a clearer improvement in buying interest.

On the topside, the 20-day EMA at 1.3277 is serving as a dynamic nearby barrier. A sustained break higher would bring the September 30 high at 1.3311 into focus as the next key resistance zone. On the downside, the 10-month low at 1.3137 remains the main support level. A failure to hold that floor would open the door to further weakness toward 1.3100.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator: Fed Chair Warsh Speech

Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve in May 2026, for a four-year term that is set to end in 2030. His term as a member of the Board of Governors will expire in May 2040. Warsh, born in Albany (New York) on April 13, 1970, is an American financier and attorney who previously served on the Fed Board of Governors from 2006 to 2011 and played a significant role in the central bank’s response to the financial crisis.